Bridging the Gap: Identifying What is Holding Self-Employed Women Back in Ghana, Rwanda, Tanzania, the Republic of Congo, and Uganda

Abstract

We explore the determinants of the gender gap in income earnings in five Sub-Saharan countries: the Republic of Congo, Ghana, Rwanda, Uganda, and Tanzania. We show that first, self-employment tends to provide marginally lower average income (with the exception of Ghana and men in Rwanda) and much higher variability in income compared to wage work. Women on average earn less than men both when they are self-employed and in wage employment but also have less volatile earnings. Using the quantile decomposition methods developed in Firpo, Fortin, and Lemieux (2007), we find that the dierences in observable choices and endowments explain the gender gap in earning for the self-employed that earn the least while the gap for the most successful male and female entrepreneurs is largely driven by dierences in returns to observable covariates in the majority of the countries. These results suggest a glass ceiling eect, wherein a large portion of the income gaps between high-earning men and women cannot be explained by observable characteristics. We conclude by looking at the variables that account for a larger portion of the gender gap explained by observable characteristics and find that hours of work and industry explain a higher fraction compared to standard human capital and demographic factors such as age and education.